Starting a Small Business in the Andaman and Nicobar Islands: Tourism, Coastal Rules, Protected Areas and Island Logistics

The Andaman and Nicobar Islands are a union territory of hundreds of islands in the Bay of Bengal, known for beaches, coral reefs, diving and history. The capital, Port Blair, was renamed Sri Vijaya Puram in 2024, and islands such as Havelock (Swaraj Dweep) and Neil (Shaheed Dweep) are popular with tourists. Small businesses earn well above the national average, but island logistics and environmental rules shape everything. Here's what you need to know to start a small business Andaman and Nicobar.

This guide brings together what’s specific to Andaman and Nicobar Islands: what government data shows about small businesses in the state, the registrations and state rules you’ll deal with, the support available, and notes on its main cities. For the national rules that apply everywhere, follow the links to our detailed guides.

Key points

• The islands had about 19,000 small unincorporated businesses in 2023-24, with high average values added; some survey samples are small.
• The capital, Port Blair, was renamed Sri Vijaya Puram in 2024.
• Coastal Regulation Zone rules and environmental protections restrict construction and activities near the coast.
• Tribal reserves are protected, and entry to them is prohibited.
• The islands use the standard ₹40 lakh GST threshold for goods.

Small businesses in Andaman and Nicobar Islands: the numbers

MoSPI’s Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24 counted about 19,000 small unincorporated non-farm establishments in Andaman and Nicobar Islands, in manufacturing, trade and other services.

† Based on fewer than 100 surveyed establishments (manufacturing), so treat these averages as indicative rather than precise.

Compared with India as a whole, in manufacturing (small sample), the average business added ₹2,93,911 of value a year, about 56% above the all-India average of ₹1,88,790; in trade, the average business added ₹3,68,549 of value a year, about 35% above the all-India average of ₹2,73,779; in services, the average business added ₹5,02,945 of value a year, about 92% above the all-India average of ₹2,62,239. Value added is what a business earns from sales minus the cost of materials, stock and other inputs, before wages and the owner’s pay.

Average values added in the islands are well above the national average, reflecting tourism and the higher cost of living. Manufacturing samples are small, and costs, especially for transporting goods from the mainland, are high.

Urban or rural?

Location within Andaman and Nicobar Islands makes a big difference. Average value added per business by area: manufacturing, ₹6,50,056 urban against ₹1,74,119 rural (3.7 times); trade, ₹5,01,436 urban against ₹2,85,096 rural (1.8 times); services, ₹6,55,546 urban against ₹3,99,555 rural (1.6 times). The urban advantage is widest in manufacturing. Rural businesses usually have lower rent and wage costs, and less competition, so a rural or small-town business can still be very profitable; but if your plan depends on high-spending customers, the larger towns and cities of Andaman and Nicobar Islands are where most of that spending is.

Registrations and state rules

Udyam registration is free and national, and is the gateway to MSME schemes, priority lending and protection against late payments. See our Udyam guide.

GST: The islands use the standard ₹40 lakh threshold for businesses supplying only goods, with ₹20 lakh for services or mixed supplies. See GST registration for small businesses.

Shops and establishments: Establishments come under the shops and establishments law applicable in the islands, administered by the Andaman and Nicobar Administration’s labour department. Check current requirements. See shop and establishment registration and trade licences.

Trade licence: The Sri Vijaya Puram Municipal Council issues trade licences in the capital, with panchayats and the Administration elsewhere.

Professional tax: Check with the Andaman and Nicobar Administration whether professional tax applies.

Coastal and environmental rules: Coastal Regulation Zone rules, forest laws and marine protected areas restrict construction and some activities near beaches and reefs. Diving and water sports operators need permissions and safety compliance.

Protected tribal areas: tribal reserves are protected by law, and entry and contact are prohibited. Tour operators must never take visitors into protected areas.

Land: land in the islands is largely government-owned or subject to restrictions, so most businesses lease premises; check rules before any purchase.

Food businesses need FSSAI registration or a licence, applied for nationally on FoSCoS, with the state food safety department handling inspections and state licences. See our FSSAI guide.

Employing people: the four labour codes in force since 21 November 2025 apply nationally, with Andaman and Nicobar Islands’s own rules on details such as working hours, holidays and minimum wages. See employment contracts and HR basics.

Hiring in Andaman and Nicobar Islands

ASUSE 2023-24 found that small businesses in Andaman and Nicobar Islands paid hired workers, on average, the following each year, including employer contributions: manufacturing, ₹1,86,108 (about 48% above the all-India average of ₹1,25,345); trade, ₹1,61,262 (about 30% above the all-India average of ₹1,24,250); services, ₹1,97,103 (about 44% above the all-India average of ₹1,37,098). These averages help you budget, but you must pay at least the minimum wage Andaman and Nicobar Islands has notified for each category of worker, which the state revises periodically, and follow PF and ESI rules once they apply. Advanton’s hiring cost calculator shows the full cost of a hire, and our guide to hiring your first employee explains PF, ESI and the labour codes.

Local tips

• Plan stock for shipping delays, especially in the monsoon.
• Price for higher costs of transport and power.
• Respect protected areas and tribal reserves absolutely.
• Follow coastal rules before building anything near beaches.
• Hindi, Bengali, Tamil and English are all used.
• Water sports need certified staff and strict safety.

Support for small businesses in Andaman and Nicobar Islands

• The Andaman and Nicobar Administration’s industries department and DIC for registrations and schemes.
• Tourism department registers and promotes tourism businesses.
• Fisheries department supports fishing and seafood businesses.
• Central schemes for island territories may offer additional support; check current programmes.

Late payments: Andaman and Nicobar Islands has a Micro and Small Enterprises Facilitation Council, which hears cases filed by registered micro and small enterprises through the MSME Samadhaan portal. See getting paid on time.

Loans: national schemes such as Mudra, PMEGP and CGTMSE are available through banks across Andaman and Nicobar Islands; see business loans and government schemes.

Spotlight: Island logistics and tourism

Almost everything consumed in the islands, from food and fuel to building materials, arrives by ship or plane from the mainland, especially Chennai, Kolkata and Visakhapatnam. That raises costs and means businesses must plan stock carefully, keep buffers for shipping delays during rough weather, and price for higher input costs.

Tourism is the biggest opportunity: guest houses and resorts, diving and snorkelling operators, boat trips, taxis and scooter rentals, cafés and restaurants, and local tour guides. The main season is roughly October to May, with the south-west monsoon bringing rough seas from about June to September. Diving and water sports require trained, certified staff and strict safety practices.

The main cities

• Sri Vijaya Puram (Port Blair): the capital, with government, trade, tourism and the main port and airport.
• Swaraj Dweep (Havelock): beach and diving tourism.
• Shaheed Dweep (Neil): quieter beach tourism.
• Diglipur, Rangat and Mayabunder: North and Middle Andaman’s towns.
• Car Nicobar and the Nicobar Islands: largely restricted areas.

Opportunities in Andaman and Nicobar Islands

• Tourism: homestays, travel agencies and car rentals.
• Food: cafés and bakeries.
• Seafood: meat and fish shops.
• Solar energy: expensive diesel power makes solar installation attractive.
• Island services: courier franchises.

Common mistakes in Andaman and Nicobar Islands

• Building near the coast without CRZ clearances.
• Taking tourists into restricted or tribal areas.
• Running low on stock during shipping delays.
• Underpricing for island costs.

A checklist for starting in Andaman and Nicobar Islands

1. Register on Udyam.
2. Complete shops and establishments requirements.
3. Get trade licences from the municipal council or local authority.
4. Register tourism and water sports businesses, with safety permissions.
5. Register for GST when required.
6. Get FSSAI registration for food businesses.
7. Plan supply chains and stock buffers.

Using Advanton’s free tools

Test your idea against ASUSE figures for Andaman and Nicobar Islands with Advanton’s business idea reality check: choose your activity, select Andaman and Nicobar Islands as your state, and compare your sales, costs and break-even with the state’s averages. Make GST-compliant invoices with the invoice generator, work out the real cost of hiring with the hiring cost calculator, and when you’re ready for customers, list your business free in the India Business Directory under Andaman and Nicobar Islands.

Frequently asked questions about starting a small business in the Andaman and Nicobar Islands

What is Sri Vijaya Puram?
The new name of Port Blair, the capital of the Andaman and Nicobar Islands, adopted in 2024.

Can tourists visit tribal reserves?
No. Entry to tribal reserves is prohibited by law.

What GST threshold applies?
The standard ₹40 lakh for goods and ₹20 lakh for services.

When is the tourist season?
Roughly October to May, with rough seas in the south-west monsoon.

Can I start a diving business?
Yes, with certified instructors, safety equipment and permissions.

Can I buy land?
Land is restricted; most businesses lease.

How are goods shipped to the islands?
By ship from Chennai, Kolkata and Visakhapatnam, and by air cargo.

Do I need permits for water sports?
Yes, with safety compliance and trained staff.

Is the power supply reliable?
It depends on the island; many businesses keep backup power.

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Sources

1. MoSPI, Annual Survey of Unincorporated Sector Enterprises 2023-24, full report
2. Ministry of MSME, Udyam Registration portal
3. GST portal (Goods and Services Tax Network)
4. FSSAI, Food Safety Compliance System (FoSCoS)
5. Ministry of Labour and Employment
6. MSME Samadhaan (delayed payment portal)

Last reviewed November 7, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.